Can Cities Really Be Tech Centers?

It depends on how you define technology. That is, from software apps to circuits.

The Boston area, where I live, has long been a center for technology companies. While some are long gone—think DEC, Wang, and Prime Computer—others that started here years ago live on. Think Analog Devices, Analogic, and Teradyne. General Radio started here. Others have moved in. Oracle has a large campus. There are also lots of defense electronics here.

Many of the companies that started here began in Cambridge, just over the Charles River from Boston and home to two well-known universities. One is known for technology, the other for just about everything else. The technology companies that started in Cambridge later moved to the suburbs. They needed manufacturing space, and land is either unavailable or too expensive in the city.

Downtown Boston, seen from Cambridge.

A recent Boston Globe article noted that Downtown Boston, usually inhabited by law firms, advertising firms, and insurance companies, is now becoming home to new technology startups. That's also happened in rival New York City. Other cities such as San Francisco are seeing similar things happening.

The Boston Globe article notes that there have recently been more technology companies starting in Boston proper than in Cambridge. The author cites public transportation in the city center as a major reason. The people at these startups tend to be young. They want to live in the city, and few own cars.

There's a significant difference between the startups of years ago and those of today: hardware versus software. Today's tech startups are mostly in the business of developing web apps or mobile apps, as opposed to designing circuits and systems. They don't need manufacturing facilities in the suburbs the way previous generations did. The previous generations developed and built the infrastructure that these supposedly cool apps need, not only to run, but also to transfer their data. Boston has become a database hub. Would you call that technology?

While most of the people working at these startups need only a wireless connection and a laptop, there are exceptions. One such exception is Saleae, a company making logic analyzers in San Francisco. I spoke with founders Mark and Joe Garrison the other day about their products. When I learned they were in San Francisco rather than Silicon Valley, I had to ask about that.

San Francisco is also attracting young engineers.

Mark and Joe explained that their company is located in a corner of San Francisco proper, not downtown. Still, they explained their desire to live and work in the city. "Young engineers want to live in the city now," they said. They admitted that 99% of those engineers were writing software. Many work in large Silicon Valley companies such as Google and Facebook. One result of having so many well-paid, educated workers living in the city is that housing costs have soared.

Here in Boston it seems that engineers—hardware engineers at least—live in the suburbs where their jobs are. I often attend IEEE-sponsored meetings of both the EMC Society and the Reliability Society. Reliability meetings are typically held in Lexington, which is on the Route 128 belt. That's the inner loop around Boston. The EMC meetings are held around I-495—the outer loop, about twice the distance from Boston as Route 128. The engineers at these IEEE meetings tend to be older, design hardware, and live out there in the suburbs where they raise their children. When I attend these meetings, I need a good hour to get there, because I live close to Boston proper, within walking distance of the city line.

All of this press about technology startups leads me to ask, "Do you consider these app houses to be real technology companies?" After all, the people at them assume the digital infrastructure works perfectly all the time. Somebody has to keep developing the technologies to keep the bits flowing. While it may not be cool to develop the infrastructure, somebody has to do it. In the end, these cool apps could provide lots of jobs for optical, signal integrity, EMC, and other engineers.

The trend will most definitely continue, even post-children (should they choose to have any/as many is a different topic). NYC is a good example of where many generation X-ers, now in their 40s, really prefer to just stay in the city. Of course there are those that prefer not to or simply want a change, but it's interesting to see that many are choosing to stay.

I would go as far as to say that the ability to live in an urban center has largely influenced career decisions. Many students from top engineering schools found opportunities in finance/ marketing/ consulting/ law, and it's undoubtedly partially influenced by the ability to live in places like NYC, Chicago, SF, etc. If say Intel had established offices in such paces, they probably would have lured more talented graduates who later chose other paths to actually pursue an engineering-related career.

A little story - I knew a guy who did an MS (in computer science) at Stanford in the early 2000s, got bored of California's laid back living and corporate life at Oracle (and recall there were very few promintent startups in the early 2000s), and moved back East to be where the action was (and later went into something completely different). I wonder if he's looking back now and shaking his head in regret of what exciting opportunities he could have pursued with his background as a Stanford CS grad.

If IoT actually becomes the next big thing, don't be surprised to see a new breed of startups in cities, and as a side effect, retaining many bright minds who won't exit engineering totally.

Living in the Bay Area my entire life, there is definite shift among not only the younger set to live and work in SF, but also the older set. Empty nesters that live on the Penisula are also moving to SF to enjoy all the City has to offer. In hind site, I should have moved there when I was single. There is so much to do. But, I'm stuck in the 'burbs. You hit the nail on the head. If it's software related and you're a software engineer then you can call the shots where you want to live and who you want to work for. If you're in hardware (semi) then more than likely you're living and working in the South Bay (San Jose, Santa Clara, etc.). It's boom time again here in the Valley and it's spreading to the City. How long it will last no one knows. Fasten your seat belts. One other comment: Salae is barely in SF. Right off 101 near old Candlestick Park. Not the greatest area of SF. Certainly no cable cars go there.

I'm not sure how I'd class the app companies; maybe technology companies but not high tech companies, because they use existing technology but aren't creating new technology.

As far as I'm concerned, San Francisco is a nice place to visit, but not to live (and when I was single, I spent more time in the Sonoma county wine & beer areas than SF). Also, a lot of SF isn't that exciting, either, and you're farther from the interesting tech stores such as Fry's and Excess Solutions.

And I do suspect that when many of these youngsters start having children, they will want to move out, too, because of safety, schools, and room. After all, the suburbs have been around for a long time (e.g. Philly's Main Line since the 1820's). Of course, by then they'll probably be working for a different company because they'll be too old and have been replaced by younger city-dwelling hipsters or their companies will have gone bankrupt or been acquired.

I've been reading about how young people prefer to live in or close to cities these days, as opposed to the distant suburbs (exurbs). This is the way it used to be, so why should anyone be surprised? Before WWII, and the car/suburb phenomenon, cities were where the well-off lived. This has been largely true in Europe all along. So, why shouldn't US cities regain their former glory? I'd say, it's about time.

It will be interesting to see whether younger people continue this trend after they have kids of their own. Indications are, according to what I've been reading, that they don't want to move far from the city, if move at all, even after they have kids. The notion that people MUST want to get "more house for the money," where "more" is in square feet, by moving far out, is a notion that no longer seems to hold a lot of sway. Good deal, I say.

As to using the infrastructure vs designing or building the infrastructure, I'm sure there are very many jobs, even in companies like Cisco, that don't require working inside a factory. But even if someone has to work in more of a factory setting, it's still possible to commute out rather than commute in. The other aspect of this is, even just office space inside cities is becoming prohibitively expensive. Companies that need to keep their overhead costs down can't afford to set up offices in cities, in many cases. So, it's not just factories that locate out in the suburbs anymore.

I think that cities which get a reputation for being "tech centers" are simply cities that have a number of tech-related universities. Boston/Cambridge and San Francisco are certainly two such, but so are others, e.g Raleigh/Durham NC, LA, even Wash DC suburbs.